I purchased Nero Suite 8 several years ago, and have used the copy of Nero Recode 3 that came with it a lot, but recently, it stopped recognizing Mpeg2, one of the most common video formats, and one that I have used a lot.

When I go to open an Mpeg2 in Nero Recode 3, I get a message reading: " Nero Recode encountered an error and cannot continue.
Unable to import file (file name.mpg.)
Please make sure that the selected file is a valid and non DRM-protected video that is playable on your system."

The files that I'm trying to convert are not DRM protected. I recorded them myself. I've tried several different Mpeg2's from different sources, and none work, so it's not a source or formatting issue. The version of Nero that I have is a legitimate, purchased and registered version.

What's weird, is Nero Vision, another program from the same suite can recognize Mpeg2's, but that part of Nero lacks some of the features that I want in Nero Recode. I'm guessing the Mpeg2 codec for Nero Recode somehow got deleted or corrupted, but I don't know how to fix it, and of course Nero doesn't trouble shoot that version of their program anymore. Any help would be much appreciated.

I'm not aware of Nero being affiliated with DVDShrink, and actually my Nero Recode 3 has been able to open straight Mpeg2 files for years. This is a recent issue that has popped up.

The author of dvdshrink stopped updating it and went to work for nero, where his creation came to be known as recode. Loosely saying, recode is therefore dvdshrink without the decryption.
I used nero until about v5. It had a very good CD/DVD burning program at its core. It however gradually became bloatware with scores of other little programs increasingly piled on top of that, some useful, others so-so. That is not a bad thing per se, but in attempting to be sort of a swiss army knife of programs for the non-techie, installing nero can cause some very nasty changes in a computer whose behaviour you like and have grown accustomed to. Part of the problem is nero's insistence in making itself the default program for opening certain files. I don't know if in the latest versions there is an option for opting out of this or not. A way out of this was to install nero 1st instead of last (when installing other programs that access and manipulate the same types of files). Other program authors also like to play ball and on installation automatically look for nero defaults and change them, giving as good as they get.
What I'd do is completely uninstall Nero and remove all the vestiges of its existence in that computer, registry and all. Reboot (as in completely unplug computer) and reinstall. Figure out how to change file type associations such that double-cliking *.mpg opens recode. Don't double clik though; open recode as admin, then load the *.mpg.

For the nth time, with the possible exception of certain Intel processors, I don't have/ever owned anything whose name starts with "i".